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Joanne B. Ciulla
Scholar

Joanne B. Ciulla

Joanne Ciulla is Professor and Coston Family Chair in Leadership and Ethics at the Jepson School of Leadership Studies, University of Richmond, the only undergraduate degree-granting school of leadership studies in the world.

You Can't Buy Leadership

We are all familiar with the ethical dangers of power, and the privileges bestowed on corporate leaders can also be morally corrosive. When you give people privileges, you tell them they are special and set them apart from other people in the organization. In the corporate world, privileges extend beyond salary and bonuses to everything from corporate jets, to huge expense accounts and opulent offices.

Over the past 20 years or so, business writers elevated CEOs to celebrity status. We were living in what economists Robert H. Frank and Phillip J. Cook call a "winner-take-all society" - one where the rewards for "winners" are wildly disproportionate to the rewards for event the ones who come in second. Reinforced by the business media, this mentality created a kind of "arms race" for the business superstars and wage disparities between CEOs and workers skyrocketed.
The job perks plus this social sense of being exceptional create an environment in which some CEOs think they stand apart from society.

So, perhaps in December of 2008, John Thain was convinced that he deserved a $5 to $10 million bonus while others were losing their houses and jobs. He really thought he was that special. Leaders get into ethical trouble when their sense of being special results in the belief that they are exempt from the social and moral constraints placed on everyone else. It is not just that such leaders fail up to a higher ethical standard, they fail to live by the same social and ethical norms as the rest of us.

Over the years, the typical response to feckless or unethical CEOs has been a call for better oversight by the board. This hasn't always worked because boards are generally made up of people who have bought in to the winner-take-all mentality - many of them are "special" too. Unlike other corporate scandals, it is not illegal for Wall Street leaders to give out bonuses. So more oversight or better laws will not remedy the problem.

The answer lies in finding different rewards systems and different sorts of people to be CEOs. The current environment assumes that there is a tiny pool of people who can run corporations and you have to pay them a premium and give them the trappings of royalty to get and keep them. Yet what we have seen in the past and are witnessing today is that money and perks don't always buy the best leaders, moreover, they have the potential to turn good leaders into bad ones.

By Joanne B. Ciulla

 |  February 3, 2009; 2:01 PM ET
Category:  Economic crisis Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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CEO's should possess a few saintly qualities including the love of humanity, and a touch of H.D. Thoreau's maxim that you can assess a person's real wealth by how little they own and need to own. When material values become over-valued, spiritual values are often the remedy, especially for limelight leaders who are role models for the next generation.

Posted by: LWittgenstein2 | February 4, 2009 12:40 PM
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What is the deal here? All the "experts" with the exception of a token asian and a token female are white males!! To gain wisdom into this disaster, we need many voices from all sorts of angles. Business school deans are only one voice, not to mention that they have educated our current crop of "Masters of the Universe". More viewpoints needed!!

Posted by: Vgeiger | February 4, 2009 11:56 AM
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Thank you, Professor Ciulla, for your astute observations. This sense of entitlement, while with us through the past 100 years in the business world has increased significantly in the past twenty. Maybe you have found this with your students, but as a professor with both undergrad and grad classes, even young people have this "I'm special" sense. They consider a grade of B to be average, balk at having to spend any time reading the text or studying for an exam, and demand high starting wages, lots of benefits, and raises/promotions within the first six months. The hidden silver lining of this recession is that many "ordinary" people will have to learn that they are not special, not entitled. . .whether its for a new BMW every three years, a big screen TV, or increasing credit card debt. Unfortunately, that message is, and will not, get through to the elite leadership. Good luck with your work with students.

Posted by: wexler1 | February 4, 2009 11:42 AM
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The good professor makes many valid points, most of them should have been picked up when the writers and CEOs were playing sandlot ballgames or watching old movies. Of course, hubris is a wonderful thing and maybe these guys just missed that class on their way to B school.

Posted by: fmiata | February 4, 2009 12:39 AM
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